Mark McLaren Class Representative Ltd v MOL (Europe Africa) Ltd [2024] CAT 10

In these collective proceedings arising from the shipping container cartel, the class representative Mark McLaren sought certification and approval of revised litigation funding arrangements following PACCAR. The proceedings concerned allegations that major shipping lines including MOL had operated a cartel in relation to roll-on roll-off vehicle shipping services, causing overcharges to businesses and consumers. The funder had restructured its LFA after PACCAR to remove the direct percentage-of-damages return mechanism and replace it with a multiple of capital committed. The defendants challenged the enforceability of the revised agreement, arguing that despite the restructuring, the economic substance of the arrangement remained that the funder’s return was ultimately derived from damages. The CAT reached the same conclusion as it had in Alex Neill, holding that the revised LFA was not a DBA.

The Tribunal applied consistent reasoning that where the funder’s return is calculated by reference to its own capital outlay rather than by reference to the quantum of damages recovered, the agreement does not fall within the statutory definition in section 58AA. The fact that the funder would only receive its return if damages were in fact recovered did not, in the Tribunal’s view, transform the agreement into a DBA. The contingent nature of recovery was a feature common to all litigation funding and did not engage the DBA regime. The percentage-of-proceeds fallback clause contained in the original agreement was treated as dormant, mirroring the approach taken in Alex Neill. The decision reinforced the emerging consensus that the restructured LFAs adopted across the market in response to PACCAR were likely to withstand challenge, providing significant reassurance to funders and class representatives in pending collective proceedings.